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Research Article

The Impact of Regulatory Focus and Purchase Interval on Customer's Preference to Reward Program

Lee, Soyeong1 · Hyang-Mi Kim1

1 Korea University

Published: January 2011 · Vol. 15, No. 2 · pp. 141-156
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Abstract

In recent years, increasing number of businesses are offering Customer Reward Program. As an important tool for Customer Relationship Management (CRM), reward programs can increase brand loyalty, create switching costs, and make customers buy more and frequently than before. However, not all of the reward programs are effective for creating customer loyalty. Many researchers claim that important shortcomings of existing reward programs is that they only deal with the customer in aggregate level (Kumar and Shah 2004). Reward programs usually rely on the accumulated customers purchase behavior to determine which customers get rewarded with what type of rewards (Kopalle et al. 2007). However, in recent years, the importance to explore potential individual differences or customer characteristics in response to the reward program has been recognized. Such argument is supported by Lewis (2004) and by Taylor and Neslin (2005), who suggested that the customer segments may vary in their responses to reward programs. It is thought that infrequent users prefer immediate discount even though the discount rate is small while frequent users continue to accumulate points for big reward. Considering the goal of reward program, the delayed or accumulated reward types have more potential to build customer loyalty rather than immediate discount type. In this study, we suggest that the customers’ preference to immediate discount can be reversed by marketing effort based on regulatory focus. Regulatory focus (Higgins 1997) theory distinguishes between two major categories of desired goals: those that relate to attaining positive outcomes such as advancement, achievement, and aspirations (termed promotion goals) and those that relate to avoiding negative outcomes such as responsibilities, obligations and security (termed prevention goals). According to the theory, individuals with promotion focus will regulate their behavior toward positive outcomes, and those with prevention focus will regulate their behaviors away from negative outcomes. These distinctions are important because those goals may be distinguished not only in terms of the desirability of end state, but also by the strategies that can be adopted to achieve them. The self-regulatory goals not only accessible chronically at the individual level but also can be made accessible temporarily in situational context. University students took part in our experiment. The results of experiment show that customers' preference to immediate discount can be altered by priming with promotion goal.
Keywords: 보상프로그램조절초점